Crude Oil
Oil prices fell on Thursday after data showed weak factory activity in China. However, Brent prices staged a smart recovery to end the day marginally positive. The expiring Brent December contract fell 38 cents to settle at $60.23 a barrel. The January contract settled at $59.62 a barrel. WTI crude futures fell 88 cents to settle at $54.18 a barrel..
Official data from China showed factory activity shrank for a sixth straight month in October while growth in the country’s service sector was its slowest since February 2016.
U.S. crude faced extra pressure after flows out of the Cushing, Oklahoma storage hub were disrupted because of reduced flows on a pipeline. TC Energy Corp’s 750 kbpd Marketlink crude pipeline from Cushing, Oklahoma, to Nederland, Texas, was operating at reduced rates. On Tuesday, it had shut down after a leak in North Dakota. Marketlink is connected to the 590 kbpd Keystone oil pipeline system, which transports Canadian crude from Alberta to refineries in the U.S. Midwest and the Cushing storage hub. The Keystone outage should dent supplies at Cushing, the delivery point for U.S. crude futures.
The trade war between China and the United States encountered a new obstacle when the summit at which they were supposed to meet was cancelled because of violent protests in Chile, the host nation.
A poll of 51 economists and analysts forecast Brent crude would average $64.16 a barrel in 2019 and $62.38 next year.
The US said on Thursday it had imposed sanctions on the Iranian construction sector and trade in four materials used in its military or nuclear programs, even as it waived sanctions to let foreign firms continue non-proliferation work in Iran.
Naphtha
Asia’s naphtha crack rose for a third straight day on Thursday to a one-week high of $87.78 a tonne, supported by tight supplies. The strong fundamentals were reflected in spot premiums.
Taiwan’s Formosa Petrochemical Corp bought 150 KT of naphtha for December arrival at Mailiao at premiums of about $22-$24 a tonne to its own price formula on a C&F basis. This was the highest premium the petrochemical maker and refiner had paid since February 2013.
The November crack is marginally higher at – $ 2.45 / bbl.
Gasoline
No fresh news on gasoline markets. Light distillate inventories in Singapore rose by 712 KB to 11.74 million barrels, data from Enterprise Singapore showed on Thursday. These are the highest levels since the middle of July this year.
The November crack is marginally lower at $ 6.85 /bbl
Click Here for a graphical depiction of Global Gasoline stocks by region.
Distillates
Cash premiums for 10ppm gasoil dropped 2 cents to 96 cents a barrel to Singapore quotes on Thursday.
Middle distillate inventories in Singapore rose to a three-week high of 11.21 million barrels, data from Enterprise Singapore showed on Thursday.
Cash premiums for jet fuel fell to a premium of 8 cents a barrel to Singapore quotes, compared with a premium of 11 cents per barrel a day earlier.
The November crack for 500 ppm Gasoil is lower at $ 15.00 /bbl with the 10 ppm crack at $ 16.00 / bbl. The regrade is at $ 0.50 /bbl
Click Here for a graphical depiction of Global Distillate stocks by region.
Fuel Oil
Asia’s 380-cst high-sulphur fuel oil. The 380-cst Nov-Dec time spread was at $34.75 a tonne on Thursday, up from $31 in the previous session.
Residual fuel oil inventories in Singapore climbed to a two-week high of 21.85 million barrels in the week to Oct. 30, boosted by higher net imports.
The November 180 cst crack is higher at -$ 13.75 / bbl with the visco spread at $ 1.05 /bbl.
Click Here for a graphical depiction of Fuel Oil stocks by region.
Hedge Recommendations
No fresh recommendations today.
Hedge recommendations are essentially made for refiners. These are not trading positions as such. The rationale of these positions is to lock in extraordinary levels for the refiner.
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About this blog
This blog post attempts to give a top level summary of the Singapore market goings on to a person who seeks to obtain a directional sense of the market on a daily basis.